Bitcoin yesterday neared an all-time high as bullish sentiment gathered steam ahead of a listing by the largest US cryptocurrency exchange.
The token rose as much as 2.6 percent to US$61,229, the highest in nearly a month, before falling back to trade little changed.
On March 13, bitcoin reached a record of US$61,742. The cryptocurrency is up almost ninefold in the past year, a return that towers above that of more familiar assets like equities or bullion.
Against the backdrop of Wall Street’s growing embrace of cryptocurrencies, the direct listing of digital-token exchange Coinbase Global Inc is fanning interest.
Coinbase is due to go public on the NASDAQ Composite tomorrow, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.
“A crypto company moving to IPO [initial public offering] is a big milestone,” said Nick Jones, chief executive officer and cofounder at cryptocurrency wallet Zumo. “It’s moves like this that make consumers feel safer with crypto and ultimately boost confidence in the space.”
A growing list of companies are looking at or even investing in bitcoin, drawn by client demand, price momentum and arguments that it can hedge risks such as faster inflation.
Tesla Inc earlier this year disclosed a US$1.5 billion investment in bitcoin and more recently started accepting it as payment for electric vehicles.
Elsewhere, Goldman Sachs Group Inc has said it is close to offering investment vehicles for bitcoin and other digital assets to private wealth clients.
Morgan Stanley plans to give rich clients access to three funds that would enable crypto ownership.
The deck of exchange-traded funds tracking the token is expanding, while Paypal Inc and Visa Inc have begun using cryptocurrencies as part of the payments process.
A study by Dutch asset manager Robeco suggests that despite its high volatility, a 1 percent allocation to bitcoin in a diversified multiasset portfolio could be beneficial, given its resemblance to gold and its near-zero correlation to other asset classes.
“In recent months, a clear and emphatic narrative that bitcoin is becoming a store of value in the form of digital gold has developed,” Robeco portfolio manager Jeroen Blokland said.
Other cryptocurrencies, such as second-ranked ether, have also been climbing. The overall value of more than 6,600 coins tracked by CoinGecko recently surpassed US$2 trillion.
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